The Massachusetts Department of Unemployment Assistance (DUA) recently issued new guidance for employers, addressing a number of questions related to the effect returning to work will have on employees’ unemployment benefits and employers’ obligations.  The guidance addresses topics including the effect on unemployment of an employee’s refusal to return to work; recommended practices for communicating return-to-work offers to employees; how to report unreasonable refusals of return-to-work offers; what employees should do when they return to work; potential obligations of employees who receive back pay; and the effect of COVID-19-related unemployment benefits on an employer’s experience rating. 

What Happens if an Employee Refuses to Return to Work?

The DUA’s guidance makes clear that refusing to return to work because a person would prefer to continue collecting unemployment benefits, or because their current weekly unemployment benefits are higher than their regular wages, would be considered fraud.  The DUA also noted circumstances that may disqualify an employee from collecting unemployment benefits:

• Employees who quit to collect unemployment may be denied benefits.

• Employees who can work remotely, but refuse to do so, may be denied benefits.

• If an employee whose work requires them to be physically present in the workplace refuses to return to work, the employer may lawfully terminate their employment, and they will be denied benefits.

Note that employees with a “reasonable justification” for refusing to return to work may still be eligible for benefits.  The DUA does not offer many specifics about what “reasonable justification” would be, except that it is “a fact-specific inquiry,” and that “the employee’s own health situation,” “the work conditions and the job the employer offers” and “whether employees work with or near other employees or members of the public” are “important considerations.”  Likewise, the guidance states that employees can reasonably refuse to return to work due to an underlying medical condition, other risk factors, or if they are required to quarantine.  Such employees may be permitted to continue collecting unemployment.

How Should Employers Tell Employees They Should Return to Work?

When returning employees to work, the guidance recommends that employers directly and clearly communicate the details of the work being offered.  The DUA suggests that this communication include: (1) the start date; (2) a full-time/part-time designation; (3) the wage; (4) the type of work; (5) the hours to be worked; (6) the general location; and (7) the conditions of the job.  The communication should make clear that “work is being offered as opposed to a general discussion of work possibilities,” and “if a job offer is made, it must be clearly communicated as an offer of work.”  Providing this information will help the DUA (and the employer) prove that an employee unreasonably refused an offer to work.

What Should an Employer do if an Employee Refuses to Return to Work?

An employer can report refusals to return to work by emailing UIFraud@MassMail.State.MA.US. An employer’s report of suspected unemployment fraud should include the date the offer of work was made, the date the employee would have returned to work, and a description of how the offer was directly communicated to the employee.

What Happens to Employees’ Unemployment Claims When They Return to Work?

Individuals receiving benefits from DUA are required to file weekly certifications that they are still unemployed and looking for work.  According to the guidance, employees returning to their jobs should simply stop filing their weekly certifications, and the claims will automatically be closed by the system.

Employees returning on reduced hours can continue filing weekly claims, as they may still be eligible for partial unemployment benefits depending on the number of hours worked and gross earnings achieved during a week. If reduced-hours employees receive any weekly unemployment benefits, they will also receive the federal Pandemic Unemployment Compensation (FPUC) payment – a flat $600 per week. However, once a part-time employee returns to full-time work or the employee begins to earn more than their weekly benefit amount consistently, the employee will no longer be eligible for unemployment benefits and will no longer be eligible for the $600 FPUC payment.

What if an Employer Provides Returning Employees Back Pay or Retroactive Pay?

If an employer pays an employee for previous weeks that the employee was not working and the employee also filed for unemployment benefits for those same weeks, the employee will need to notify the DUA that they have received back pay. An employee’s failure to do so may result in the possible imposition of a penalty on, and prosecution of, the employee.  Also, if an employer provides an employee a retroactive wage or salary payment that requires the employee to repay their regular unemployment benefits, the employee may be required to repay the $600 FPUC payment they received for the impacted weeks.

How Does COVID-Related Unemployment Affect an Employer’s Experience Rating?

The guidance states that employees receiving unemployment benefits due to COVID-19-related issues—such as a quarantine order or a substantial risk to the person’s health and safety from working—will not count against an employer’s experience rating.  (Non-profits or government entities using the reimbursable method of unemployment are responsible for funding 50 percent of such claims.)  Likewise, the $600 FPUC payment, and the 13-week extension provided by the CARES Act, are fully funded and will not affect experience ratings either.  

Conclusion

The DUA guidance provides employers some clarity on their obligations related to unemployment insurance and the return of their workforces. Employers should take care to communicate offers to return to work clearly and in writing, and report unreasonable refusals to work to the DUA.  However, the DUA guidance appears sympathetic to returning employees, and it remains to be seen how the reasonableness of employees’ justifications will be inspected by the DUA.